FAQs
General Eligibility
What are the basic qualifications of all business loan applicants?
The basic qualifications for all business loan applicants are:
The applicant must live or operate a business in an area served by GAC.
Documentation confirming legal residence or work authorization, such as a Social Security Number, ITIN (Individual Taxpayer Identification Number), or Permanent Resident Card (Green Card).
The applicant must be at least 21 years of age or older than 18 with a qualifying co-signer.
Must be legally competent to enter a binding contract.
An applicant’s income must be sufficient to repay the loan from GAC.
Applicants should demonstrate a strong commitment to meeting all financial obligations, including timely repayment of their GAC loan.
Must have invested some savings or personal equity in the business.
What would make an applicant INELIGIBLE?
The following would make an applicant INELIGIBLE:
Inability to repay debt as determined by GAC after a complete application review.
Unresolved tax liens may disqualify an applicant. If you are on a payment plan, please inform your loan officer.
Active bankruptcy or a bankruptcy that has been discharged less than 12 months prior to the application.
Businesses engaged in lending, adult entertainment, firearms sales, real estate development, multi-level marketing programs are ineligible.
Delinquent mortgage, rent, or child support, or multiple recent charge-offs and delinquencies that have not been addressed.
Making false statements on claims on your application.
Loan Amounts, Interest Rates and Terms
What is the maximum amount of a loan that I can Borrower?
GAC grows with your business. GAC lends up to $500,000 and your overall business conditions—including financials, credit history, and ability to repay—will determine the final loan amount we can offer.
What are the interest rates charged?
For most term loans, rates are tied to Prime, while working capital facilities typically include an additional 50 basis points. Final rates are determined by several factors, including the loan program, whether your business is a start-up or existing enterprise, the loan term, your credit profile, and other underwriting considerations.
How much are your fees for applying for a loan?
GAC does not charge an application fee. If your loan is approved, a one-time origination fee and any required third-party collateral filing fees will apply. To minimize out-of-pocket costs, most borrowers may choose to roll the origination fee into the loan amount at closing.
How long will I have to repay my loan?
GAC typically offers loans with terms of up to 60 months. The length of your loan will depend on the use of funds, your business operating cycle, your credit profile, and other underwriting factors. Except for our commercial real estate loans, most GAC loans are fully amortizing.
Are there fees for paying off loans early?
GAC does not charge any prepayment penalties or fees for paying off your loan early, whether in part or in full. In fact, we encourage early repayment when it makes sense for your business.
Will I be required to pledge collateral for the loan?
Collateral is a helpful contingency but it not always required. Many of our smaller loans have no collateral requirements, while others are reviewed on a case by case basis. When collateral is needed to provide enhancements to your loan request, we allow for a great deal of flexibility. Some examples of collateral can include a blanket lien against general business assets, vehicle titles, equipment and real estate.
Do I qualify for a loan if I have a bad credit score?
GAC does not based its lending decisions on a credit score, however the amount that you are eligible for, in many instances, will be dependent upon your credit score. Credit is reviewed on a case-by-case basis. Challenged credit score can be mitigated by other factors such as stronger ability to repay, higher collateral values, good liquidity, long term experience within industry.
Will I need a co-signer/co-borrower?
After an initial review of your loan request, a GAC loan officer will determine if a co-signer is necessary to enhance your loan request. Co-signers are often needed to strengthen the request by either providing additional income necessary to support the debt, mitigate weak credit and/or collateral and may be needed to provide additional business experience.
Loan Types and Loan Uses
What are some typical uses of loan proceeds?
The loan proceeds must be used for business purposes only. Some examples of business use includes but are not limited to: working capital, equipment purchases, inventory purchases, leasehold improvements, purchase an existing business, or commercial real estate.
Can I purchase residential investment real estate with loan proceeds?
No. GAC does not issue loans for the purposes of purchasing real estate for investment purposes. GAC does however have a commercial real estate loan for businesses to purchase commercial real estate that will be occupied by their business.
Can a loan from GAC be used to consolidate other business debt?
We do not generally offer loans strictly for business debt consolidation, however, on a case-by case basis, we will allow a portion of the total loan proceeds to be used to pay off existing debt if the debt will improve the organization’s position and repayment ability. For further information regarding this, please contact one of our loan officers.
I have a home-based business. Am I eligible to apply for a loan?
Absolutely! GAC offers loans to a variety of business types including home based business, retail business with physical storefronts, professional services business, manufacturing businesses, online business. You do not need a physical location in order to be eligible for a loan with GAC.
Can my Non-Profit organization obtain a loan from GAC?
Yes. We are able to provide loans to nonprofits.
What types of businesses are eligible to apply for a loan?
As a community-based, mission-driven Community Development Financial Institution (CDFI), GAC supports a range of business types. Common borrowers include service and retail businesses, restaurants and caterers, childcare providers, health and wellness businesses, construction contractors, light manufacturers, professional services, and transportation or logistics companies.
What types of businesses are ineligible to apply for a loan?
Businesses that engage in weapons sales, non-profit organizations, real estate development for investment only purposes, residential real estate rehabs or leas, money lending or financing, multi-level marketing programs, illegal or polluting activities, or adult entertainment are among those that are not eligible for financing with GAC. This list is not exhaustive. If you have additional questions regarding your businesses’ ability to apply, contact one of GAC’s loan officers to discuss.
Other General Loan Questions
What happens after I submit my loan application?
One our GAC’s loan officers will contact you upon receipt of your application and will follow up with you to discuss your request, ask for any additional information that is necessary to process your application or request to schedule a site visit at your business, if applicable.
Should I need more money than your program allows, can I apply for a loan with other micro-lenders as well as with GAC?
While we commend you for being proactive with raising funds for your business, we are concerned about the amount of debt your business takes on. Our experienced lenders are happy to provide you with a preliminary review to help you with determining your ability to repay a higher amount. If your business’ financial needs and capacity to repay are greater than the maximum amounts offered by GAC, we are happy to refer you to similar lenders that may be able to accommodate your request.
If you have already applied for financing through a similar micro-lender, we encourage you to continue through the process with that lender, unless other unusual circumstances exist. We do not encourage multiple requests at the same time. Each micro-lender will evaluate the total debt obligations and this amount will be reviewed when determining your ability to take on additional debt.
What geographic areas does GAC lend?
Currently GAC’s lending is reserved for the greater Cook County, Illinois areas including Chicago and its surrounding suburbs as well as parts of Northwest Indiana.
Do I need a business plan to apply for a loan?
Yes. GAC requires a business plan or business model canvas if your business has been operating for less than 12 months or if you do not yet have a website. The plan should include, at a minimum, a marketing strategy and cash flow projections for at least 24 months, with monthly detail for the first year.
I’m concerned about the big bank processes where loans are underwritten by someone who I have not met.
GAC is not a bank and does not operate like one. We underwrite all loans internally because we strongly believe your loan officer should know you—and your business—best. Understanding your industry, your market, and the communities you serve is essential, which is why we have local loan officers and in-house underwriters dedicated to meeting your needs.
In most cases, the loan officer who receives your initial request and interviews you will also underwrite your loan and guide you through the entire process, from application to funding. Once your loan is approved, this same lender will typically continue as your relationship manager.
At GAC, you are more than a number. Your GAC representative is a partner and trusted advisor, here to provide ongoing support and business development resources for as long as you need them. Our goal is to help you succeed and continue the vital work you are doing in your community.
If you’re unsure about applying or have additional questions, our experienced loan officers are here to help. We’re happy to talk through the process and answer any questions you may have. Contact us anytime at loans@greenwoodarchercapital.org.